The Problem With the European Welfare State

This week’s The Week has a nice article on Germany’s new chancellor entitled Can Merkel dismantle the welfare state? (subscribers only) Germany is a showcase for what can and will go wrong when you have massive taxation for government programs, and why countries across Europe are abandoning this model.

Germany has 5 million people unemployed. Our markets are â€œoverregulated.â€ Our competitiveness is â€œself-limiting,â€ strangling itself in a â€œcorset of consensus between management and labor.â€ Our social safety net, though unsustainably expensive, has become â€œa sacred cow.â€

Arguably, a welfare state doesn’t create unemployment all by itself, but it does contribute. And it creates all kinds of business problems, like employees taking regular sick days so they can work their second job, which they need to make ends meet because of high income taxes, and companies being very slow to hire people because they can never get rid of them during a downturn.

The real problem with the welfare state is that it violates basic principles (biblical principles) of government, including:

in doing so, it usurps the authority and responsibilities of the other spheres of government(business, church/community, family, and self governments) – specifically

the parent’s responsibility to educate their children (family govt)

the individual and family responsibility to provide for their own housing and food and child care

However, I do think that education and health care call for hybrid models that combine government and private involvement – but the socialized programs lean too much towards government involvement, which is their main error, IMO.